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Saturday, May 5, 2012

It was actually a decent week on the leadership list, right up until yesterday, when there were some pretty epic collapses. When the dust settled, there were only two stocks left with gains for the week. LULU was the biggest gainer, and hada double digit gain until yesterday. This came right back to the breakout point, which, if the market was not in a correction, would be an entry or add on point. It might be worth a shot right now, just in case of a good bounce, but I'm going to be gunshy for a while after getting my head handed to me on an aggressive trade here yesterday.

SWI barely budged this week, but that was good enough for the second biggest gain of the week. The target I have projected there is just a guess; this is more likely in the process of forming a new trading range. Notice the price relative line rising while price goes sideways: that is about as bullish as you can get.

HLF was the biggest decliner. This collapsed not on earnings, but on questions asked during the conference call, which got evasive answers. This is one of a few stocks that have never passed the smell test as far as I am concerned (CRM and PPD being two other examples) and I avoid them, especially when they are giving conference calls.

PAY was the second biggest decliner. This was a perfect bear setup with a break of the 50dma followed by a bounce back into it, but I missed it because my bias was long. I should have been looking for both long and short setups because I was detecting quite a bit of market weakness early in the week, but I didn't translate it to action. This might find support at the bottom pivot, but if we have entered a genuine correction (likely) this could go all the way to the 200dma. In either case I would not be inclined to buy.

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About Me

I am not a financial professional, just a guy that trades my own account.
I am also not a musical professional, just a guy that makes music on the computer. Thus, two blogs, one trading and on musical.
And, no, the picture is not me, it is the late, great John Belushi, one of the inspirations for these blogs.

About ThIs Blog

This blog is focused on technical analysis of stocks and markets, putting heavy emphasis on chart analysis. My trading style is derived primarily from my mentor, William "Yoda" O'Neil, and the focus here is on leading and breakout stocks, but all forms of trading are covered to some extent. Economic and political news that effects the market are also topics here, and the blog may occasionally become a platform for my political and philosophical ranting. I keep several spreadsheets on Google docs which track various aspects of the market and readers are welcome to vies and comment on them.

Google Docs Spreadsheets

There are several spreadsheet that I maintain on Google docs to track various watchlists and trends in the market.

1. The earnings list - a group of small and micro cap, low float stocks that have exhibited recent rapid earnings growth. They are modeled along the lines of William O'Neil's CAN SLIM system, but limited to small cap, highly volatile stocks.

2. The relative strength list - a group of stocks which are near 52 week highs and have shown an increase in average daily volume. The list is limited to the top 200 stocks according to my methodology, which will be detailed on one of the pages of the spreadsheet.